Summary
L3Harris Technologies, Inc. (formerly Harris Corporation) filed an 8-K on February 9, 2015, to announce a significant definitive agreement to acquire Exelis Inc. The transaction is structured as a merger where Exelis will become a wholly owned subsidiary of Harris. This move is set to create a larger, more diversified defense and technology company. Investors should note that the acquisition is valued at approximately $4.75 billion, with Exelis shareholders to receive $16.625 in cash and 0.1025 shares of Harris common stock for each Exelis share. The report also details the financing arrangements, including a $3.4 billion bridge loan facility from Morgan Stanley, with plans to potentially replace it with permanent financing. The closing of the merger is subject to customary conditions, including regulatory approvals (like HSR and FCC) and shareholder approval from Exelis.
Key Highlights
- 1Harris Corporation entered into an Agreement and Plan of Merger with Exelis Inc. on February 5, 2015.
- 2The transaction values Exelis at approximately $4.75 billion.
- 3Exelis shareholders will receive $16.625 in cash and 0.1025 shares of Harris common stock per share.
- 4Harris has secured a $3.4 billion bridge loan facility from Morgan Stanley to finance a portion of the cash consideration.
- 5The merger is subject to customary closing conditions, including Exelis shareholder approval and regulatory approvals (HSR, FCC).
- 6The agreement includes provisions for termination fees under specific circumstances, such as a change in recommendation by Exelis' board.
- 7Harris intends to file a Form S-4 registration statement with the SEC for the Harris common stock to be issued in the merger.